By CANADIAN VENDING
The Second Cup Ltd. announced that the closing date of its acquisition of Ottawa-based Bridgehead Coffee has been postponed to provide Bridgehead with sufficient time to obtain the remaining third party consents required to complete the transaction. The acquisition is expected to close in January 2020, subject to the satisfaction of customary closing conditions.
On December 5, 2019, Aegis Brands announced a tentative agreement to acquire Bridgehead Coffee, the company’s first acquisition since it announced its new operating structure and strategy last month. Aegis Brands also owns Canadian specialty coffee retailer Second Cup Coffee Co.
All nineteen locations are corporately-owned, and have consistently delivered strong financial results in a competitive coffee market. All coffeehouses will continue to operate under the Bridgehead name following the acquisition. “We have long had a goal of being the biggest little coffee company,” explained Tracey Clark, Bridgehead president in a press release. “Joining Aegis gives us access to the resources to expand our footprint without needing to change who we are or what we do best: advocating for small scale farmers, offering coffee that is well-sourced, well-roasted and well-served, creating a sense of belonging for our customers and employees, and fostering community connections.”
Subject to customary closing conditions, Aegis will pay $9.5 million at closing, of which $6.0 million is cash and $3.5 million is payable in Second Cup shares. Additional earn out payments will be made based on the profitability of Bridgehead’s existing coffeehouses over the next two years. If profit targets are achieved, the payments would total an additional $1.5 million.
The transaction is expected to close later this month Kate Burnett, Bridgehead’s COO, will assume executive leadership of the company while Tracey Clark will continue to lead the Bridgehead brand in a new role as chief culture officer. Ian Clark, director of coffee, and Cliff Hansen, the company’s roastmaster, will continue in their roles, working closely with small-scale farmers to continue to deliver an exceptional coffee experience to Bridgehead customers. Bridgehead’s head office will remain in Ottawa. Upon closing of the transaction, Bridgehead will enter into new employment agreements with key employees.